If investors are looking at the Large Cap Growth fund category, T. Rowe Price Tax-Efficient Equity (PREFX) could be a potential option. PREFX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
We classify PREFX in the Large Cap Growth category, an area rife with potential choices. Large Cap Growth funds invest in many large U.S. companies that are expected to grow much faster compared to other large-cap stocks. To be considered large-cap, companies must have a market cap over $10 billion.
T. Rowe Price is based in Baltimore, MD, and is the manager of PREFX. The T. Rowe Price Tax-Efficient Equity made its debut in December of 2000 and PREFX has managed to accumulate roughly $374.54 million in assets, as of the most recently available information. The fund's current manager, Donald J. Peters, has been in charge of the fund since December of 2000.
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 15.82%, and is in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 8.01%, which places it in the middle third during this time-frame.
It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. PREFX's standard deviation over the past three years is 20.18% compared to the category average of 17.83%. The standard deviation of the fund over the past 5 years is 20.73% compared to the category average of 18.36%. This makes the fund more volatile than its peers over the past half-decade.
The fund has a 5-year beta of 1.08, so investors should note that it is hypothetically more volatile than the market at large. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. With a positive alpha of 0.57, managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, PREFX is a no load fund. It has an expense ratio of 0.82% compared to the category average of 0.94%. Looking at the fund from a cost perspective, PREFX is actually cheaper than its peers.
This fund requires a minimum initial investment of $2,500, and each subsequent investment should be at least $100.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Overall, T. Rowe Price Tax-Efficient Equity ( PREFX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
For additional information on the Large Cap Growth area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into PREFX too for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.
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